THE property firm of country’s richest man Henry Sy reported a 16% profit growth for the first six months of 2018, driven by the provincial expansion of its malls alongside higher demand for residential properties.

SM Prime Holdings, Inc. said in a statement on Monday that its net income reached P16.62 billion for the January to June period, on the back of a 15% uptick in consolidated revenues to P49.77 billion.

“SM Prime’s expansion projects in various progressive provincial areas in the Philippines, as well as bolstered presence in Metro Manila, allowed the Company to maintain double-digit growth in all of our businesses,” SM Prime President Jeffrey C. Lim was quoted as saying in a statement.

The listed property developer’s shopping mall business accounted for the bulk of total revenues at 58%. Mall revenues jumped by 12% to P28.71 billion.

Rental revenues rose by 13% to P24.49 billion, driven by same-mall sales that went up by eight percent and contribution from newly-opened and expanded malls. Cinema and event ticket sales grew 10% to P2.59 billion, boosted by blockbuster films such as “Avengers: Infinity War,” “Jurassic World: Fallen Kingdom,” and “Deadpool 2.”Advertisement

SM Prime had 77 malls as of end-June, with 70 in the country and seven in China. Malls opened during the period include SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan, and SM City Telabastagan in Pampanga.

For the second half, SM Prime will be opening SM Legazpi in Albay and SM Center Ormoc in Leyte.

The residential segment through SM Development Corp. (SMDC) generated P17.05 billion in revenues, 23% higher year-on-year. The double-digit increase was driven by sales from high-rise housing projects in Metro Manila launched from 2015 to 2017.

SMDC’s reservation sales during the first half jumped by a fourth to P34.45 billion, amid a seven percent increase in number of units sold to 9,319 units. The company observed strong sales of units at its Shore 3 in Pasay City, Bloom Residences in Parañaque City, Fame Residences in Mandaluyong City, and Red Residences in Makati City.

SM Prime’s hotel, convention centers, and commercial properties group collectively generated a 10% increase in revenues to P4.11 billion.

The commercial properties group ended the period with nine office buildings covering a gross floor area of 481,000 square meters. It plans to add 130,000 sq.m. of office spaces at the Mall of Asia complex in Pasay City through the launch of the ThreeE-Com Center in the second half of the year.

For hotels, the company maintained its portfolio of 1,500 rooms across six hotels, four convention centers, and three trade halls. SM Prime will expand Park Inn-Clark in Pampanga in the second half of the year.

“We intend to deliver more integrated developments in the coming years anchored by lifestyle malls, luxurious yet affordable residences and other complementary amenities across the country. We believe that synergy among our businesses is key to sustaining our revenue and income growths, while also improving the lives of the communities we serve,” Mr. Lim said.

Shares in SM Prime gained 0.79% or 30 centavos to P37.70 each at the stock exchange on Monday. — Arra B. Francia

Source: BusinessWorld